Creditors' Voluntary Liquidation (CVL)

Creditors' Voluntary Liquidation (CVL) is a process used by insolvent companies to formally close down their business when they cannot pay their debts. In this scenario, the company's directors voluntarily choose to liquidate the business, meaning they sell off assets to pay creditors as much as possible. A licensed insolvency practitioner oversees the process, ensuring fairness and transparency. Unlike a compulsory liquidation, which is initiated by creditors or the court, a CVL is initiated by the company's leadership, focusing on an orderly winding-up of operations and settling debts while aiming to protect the interests of creditors.